Two-thirds of UK consumers to cut Christmas spending

08 November 2022 2 min. read
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British retailers have become increasingly dependent on festive spending to help secure solid financial years. But record inflation means consumer confidence is at a historic low, and only one-third of shoppers intend to go about their business as usual this Christmas.

The Christmas trading period is often a key component to retailers’ financial year. Traditionally, consumers are willing to spend more than they do for the rest of the year, purchasing presents, food, decorations and trees throughout the festive season.

But even while UK consumers committed to a blow-out Black Friday just one year ago, new research suggests many retailers will enjoy slim pickings in 2022. According to research from Accenture, two-thirds of British adults will cut down on Christmas spending this year, amid the deepening cost of living crisis.

Trafalgar Square

Inflation in Britain is still running at 10%. At the same time, the Bank of England’s hikes to interest rates mean it has become more expensive for consumers to borrow money. With wages failing to rise in line with inflation, this means many households simply cannot spend at a usual level.

Indeed, even after two Christmases under lockdowns during the Covid-19 pandemic, three-quarters of adults are still not planning a big celebration. Meanwhile, 49% of those surveyed by Accenture said they would cut back on gifts, 46% would reduce dining out, and 35% would step away from general socialising, and from additional food and drink at home. Meanwhile, 45% plan to buy food from budget-friendly supermarkets.

“The fact that shoppers are planning to spend less on gifts this year reflects just how low the mood feels in the run up to this Christmas," Accenture's Retail Strategy and Consulting Lead Kelly Askew said of the bleak statistics.

The news comes as a glut of pessimistic reports forecasts a downturn in festive spending. Elsewhere, supermarket group Asda published data suggesting UK families were £141 pounds worse off in September year-on-year. The situation may worsen in 2023, too, as the Government has jettisoned its vast energy support scheme for UK households – some of whom may face £5,000 bills in the next year.